George W. Jackson Jr.: No need to assign blame in Detroit arena deal because it was a good deal

Feb. 14, 2014

I agree wholeheartedly with the assertion made in a Feb. 7 column by Nancy Kaffer that the creation of jobs for Detroit residents is an important consideration in the development of a transformational events center district in downtown Detroit.

In the concession management agreement (CMA) that the Detroit Economic Growth Corp. negotiated on behalf of the Downtown Development Authority, Olympia Development agreed to hire Detroit residents as 51% of its construction work force. That translates to more than 4,000 Detroit jobs as the event center is built. Olympia also agreed to significant efforts to hire locally to operate the center. For instance, it will “maximize opportunities” to hire Detroit residents and Detroit-based businesses as suppliers. Olympia pledged to provide development and training opportunities and use local Detroit-based work force training programs for referrals or targeted hiring. And finally, Olympia agreed to review its efforts in these areas with the DDA.

A majority of the Detroit City Council decided that those and other community benefit commitments that Olympia Development made were sufficient, and that the city had adequate measures in place to enforce them. It’s that simple. There’s no blame to share here. In a good collaboration, all parties make concessions to get the deal done. And now it is done.

Furthermore, the jobs created by the event center are important, but are only a portion of the benefits of the total transformation that the council has approved. As the $200 million of private development proceeds around the center, it will bring in more construction, businesses and residents in a thriving community that will generate many more opportunities for Detroiters, as well. That’s a good trade for $2.9 million in land, the only asset the city had to commit to this deal.

Kaffer also asserts that the development deal to create an event center district has not received adequate public scrutiny. Quite the opposite is true. This is likely the most-scrutinized development deal in decades. The need to replace Joe Louis Arena has been obvious since Olympia Development’s lease there expired in 2010.

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The enabling state legislation passed more than a year ago. The rough draft of the development deal was presented more than seven months ago. Decisions about it since then were made by four public bodies that held at least nine public meetings. Those entities include the Michigan Strategic Fund, Downtown Development Authority, Economic Development Authority of the City of Detroit, and Detroit City Council. The resolutions, actions, minutes, agreements, and other supporting documents for all those bodies are all available to the public. I have personally answered questions from the media in news conferences at least four times. Kaffer attended none of those briefings, nor has she requested documents from the DEGC. If any part of the deal surprised her it was because she wasn’t paying attention. Nothing the public needs to know has been withheld.

The DEGC did our job well. Yes, we held some privileged conversations with Olympia Development as we negotiated proposed terms of a deal. That’s absolutely necessary to prepare any significant development for public review, and is consistent with practice across the country. Our negotiations delivered the essentials for a project that will transform downtown, generate jobs and tax revenues that will benefit the entire city, and make Detroit a must-see destination for fans of sports and entertainment. And we did it by meeting every requirement of the law and the highest ethical standards.